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Home / Futures Blog / Wednesday Morning in Grain and Oilseeds 6/28

Wednesday Morning in Grain and Oilseeds 6/28

June 28, 2017 by John Payne

This Week In Grain (T.W.I.G)Good morning friends!

Corn (N17) 359’2 unch

Soybeans (N17) 911’4  +’6

Chi Wheat (N17)  452’4   -‘6

KC Wheat  (N17) 457’2  unch

Cotton (Z17)  66.90  -.81


Good morning friends!

It was pretty quiet here in Chicago last night, prices were within a few pennies of unchanged across the CBOT.  Up in Minneapolis though, we saw prices for Spring wheat continue to push toward 7.00 with December futures now trading at 6.90, a new high for the move that has been going on for a full 40 days now.  The weather is pretty solid across the soybean and corn belt of late but heat is on its way, and with it I expect prices for corn and beans to make a push back into the upper end of the ranges they traded in the early part of June. Look at buying August or September short dated options (derivative of December futures) on breaks today. I am targeting the Aug 390 call for 6-0 cents, but others might prefer something longer dated. For soybeans I like the September 10.00 call.

Models are in agreement about this heatwave approaching, where it is centered is still up in the air.  Right now it appears to be more westward, which could bring rain into the eastern corn belt but to be honest that corn stinks right now. It probably needs it but top end yield is gone anyway according to guys I work with east of the Illinois-Indiana border. I am more concerned about what happens to NW Iowa/SE Minn/SW SD if the ridge is west. Regardless, I think the markets are set up for uncertainty which should be good for price in my opinion.

It is hard to predict what happens with the Spring wheat prices, but I have to imagine we do not see an end of this rally on hot and dry.  I think KC wheat will follow eventually, but I imagine we are seeing a lot of delivery pressure right now. That has widened spreads between Minny and KC wheat to levels not seen since 2011.  July spreads sit at 230, the high that year was 250.  If you are long that spread, a potential profit point lies there.

Lastly, cotton. The market of late 2016, early 2017 where cotton was up and the CBOT was lower has flipped on its head, the CBOT now holds leadership.  I remain short December hedges, but will look to lift on the close of the price gap just below 66.00. I look for bearish news from the acreage report on Friday but I would buy that fact.  July is performing into delivery, that keeps me hopeful for another run toward 70.00 before we harvest. Texas weather is now a slight concern, the heat will not help that even against the recent rains.

 

 

 

 

 

Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

Filed Under: This Week In Grain

About John Payne

John Payne is a Senior Futures & Options Broker and Market Strategist with Daniels Trading. He is the publisher of the grain focused newsletter called This Week in Grain, along with being a co-editor of Andy Daniels’s newsletter, Grain Analyst. He has been working as a series 3 registered broker since 2008.

John graduated from the University of Iowa with a degree in economics. After school, John embarked on a 4 year career with the United States Navy. It was during two tours in Iraq and the Persian Gulf where John realized how important commodities are to the survival of society as we know it. It was this understanding that brought about John’s curiosity in commodities. Upon his honorable discharge in 2007, John’s intense interest in the world of commodities inspired him to move to Chicago and pursue his passion in a career in the futures arena.

After a three year position with a managed futures firm specialized in livestock trading, he was given the opportunity to join the team at Daniels Trading. Being in the business and seeing how other IB’s operated, it was the integrity and straightforward approach of the Daniels management team and brokers that attracted him to make the move. Since joining Daniels, John has broadened his fundamental and technical analysis of the markets even further. John has been writing his newsletter This Week in Grain under the Daniels banner since 2011.

Working in high pressure industries like the military and capital markets, John has learned the value of preparation in times of stress. He believes that instilling within his clients the value of a good plan and a cool head for dealing with the day to day swings of commodity markets. He treats every client as a teammate, understanding that his job is to help clients achieve their goals, whatever they may be.

John is a proud supporter of the Iraq and Afghanistan Veterans of America, the Veterans of Foreign Wars and the National Corn Growers Association. When he is not working, he enjoys athletics of all kinds and spending time with his wife and their two kids.

John’s commentary is featured in the following publications:

* All Ag Radio – Sirius Channel 80
* AM 880 KRVN – Lexington, Nebraska
* RFD TV
* Wall Street Journal
* Barron’s
* China News Daily (English version)

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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